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A Roadmap to Regulatory Strategy in an Era of Hyper-Partisanship

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A Roadmap to Regulatory Strategy in an Era of Hyper-Partisanship A Roadmap to Regulatory Strategy in an Era of Hyper-Partisanship August 2020 Bethany Davis Noll NEW YORK UNIVERSITY SCHOOL OF LAW Natalie Jacewicz Copyright © 2020 by the Institute for Policy Integrity. All rights reserved. Institute for Policy Integrity New York University School of Law Wilf Hall, 139 MacDougal Street New York, New York 10012 Bethany Davis Noll is the Litigation Director at the Institute for Policy Integrity at NYU School of Law, where Natalie Jacewicz is a Legal Fellow. This report does not necessarily reflect the views of NYU School of Law, if any. Table of Contents Executive Summary 1 I. Promulgating Resilient Regulations 4 A. Procedural and Substantive Requirements that Govern Rulemaking 4 1. Notice and Comment 4 2. Reasoned Explanation Requirement 5 B. Rollback Risks and Resulting Time Pressures 6 1. Threat of Future Rollbacks Through Delays 6 2. Rollback Strategies in the Courts 7 3. Threat of Future Rollbacks in Congress 8 C. Steps to Shorten the Timeline for Promulgating Thorough Rules 9 II. Undoing an Outgoing Administration’s Policies 11 A. What Congress Can Do 11 B. What the Justice Department Can Do 12 C. What Other Executive Agencies Can Do 13 1. Pull Back on Non-Final Rules Through Stop-Work Orders and Implement Legal Delays 13 2. Promulgate Regulations Delaying, Repealing, or Replacing Rules 14 a. Delays Through Notice-and-Comment Rules 15 b. Interim Final Rules 15 c. Strategies for Effective and Efficient Rollbacks Through 16 Notice-and-Comment Rulemaking i. Vulnerable Rules 17 ii. Rules with Prior Records 17 iii. Other Considerations 17 3. Promote Legal Positions Through Adjudications and Nonenforcement 18 4. Recommendations for a New Administration to Use Administrative Tools 20 Conclusion 21 i Executive Summary gencies and the regulations they produce are indispensable to promoting an administration’s policy agenda. But to get the most out of regulations and avoid future rollbacks, agencies must navigate a tension between A adequately supporting a rule and hastening the rulemaking process. On the one hand, adequately supporting a rule involves developing legal arguments and evidentiary records necessary to survive legal challenges. Such thorough analyses take time. On the other hand, in an era of partisan tit-for-tat,1 speed is more important than ever as the threat of rollbacks after a presidential term looms large. These two forces place conflicting pressures on a president at the beginning of a term. This report discusses how an administration that begins a new term can navigate regulatory strategy. It offers advice on navigating this terrain for White House officials, the Office of Information and Regulatory Affairs (OIRA), transition teams at agencies, and advocates. The report also contains a section on how an incoming administration can roll back the prior administration’s rules if there is an inter-party transition. Though it uses the potential for a transition from the Trump administration to a Democratic administration as an illustrative example, the report is relevant for any future inter-party transition where an administration is interested in rolling back the prior administration’s regulations. A note on terminology: This report refers to the administration that wins an election as theincoming administration. Second, this report refers to the presidential administration that has just ended as the outgoing administration. And third, the report refers to the administration that will follow the incoming administration four or eight years later as the future administration. This report lays out several principles that should guide an administration at the beginning of a new term – whether it is Democratic or Republican. To do so, the report draws on lessons from President Trump’s first term as president, during which his administration deployed an array of tactics to roll back Obama-era regulations, particularly those promulgated late in the Obama administration’s tenure. These rollback tools are likely to be used in future administrations. And that risk places increased pressure on an administration’s ability to make long-lasting policy through agencies. If there is an inter-party transition, the incoming administration could also use these tools to undo policies from the outgoing administration. But they must be used in accordance with the law. As this report explains, the first priority to consider is the threat of future rollbacks: In addition to rollbacks through traditional notice-and-comment rulemaking, there are three time-sensitive tactics that a future administration can use to roll back the incoming administration’s policies, all of which the Trump administration deployed: Congressional Review Act disapprovals, litigation strategies like abeyances, and administrative delays. An incoming administration must plan the timing of its rules to mitigate these risks from a future administration as much as possible. The first time-sensitive tactic, Congressional Review Act disapproval, poses a threat if rules are finalized too late in an administration. This tactic, which typically depends on the same party controlling both houses of Congress and the White House, allows a future administration to roll back any rules that fall within a certain timeframe before the end of the prior administration. 1 The second tactic, abeyances, poses a threat if the administration’s policies are under review in court at the end of its presidential term. In that case, the future administration can seek abeyances in court to put off judicial review, clearing the path for rollbacks through rulemakings. And the third tactic, administrative delay, poses a threat if rules are not fully implemented—because either effective dates or deadlines for compliance have not yet passed. In that case, a future administration may attempt to delay implementation of the rules. Because the impact of these tools is muted the earlier a rule is promulgated, the possibility that a future administration will undertake all of these rollback efforts places time pressure on the administration’s rulemaking from the start of the new term. The fate of Obama-era regulations during the Trump administration makes these rollback risks apparent. The Stream Protection Rule, promulgated in the last full month of the Obama administration, was repealed under the Congressional Review Act.2 The Clean Power Plan, promulgated in October 2015 and therefore beyond the reach of the Congressional Review Act, was nonetheless enmeshed in ongoing litigation at the end of the Obama presidency. The Trump administration requested abeyances to stall legal proceedings, which simultaneously blocked the rule from taking effect because the Supreme Court had stayed the rule during litigation.3 And through serial delays of regulatory implementation deadlines, the Trump administration blocked some Clean Water Act regulations from being implemented.4 These risks are now part of the landscape for any new or second-term president. To mitigate the risks of these rollback tools, an administration must take several steps. First, where feasible, an incoming administration should strive to promulgate rules with compliance dates that pass before the end of the presidential term to minimize the risk that a future administration will seek to delay rules that have not been fully implemented. Second, the new administration should work to finalize rules in the first two to two-and-a-half years of the term to increase the chances that any judicial review can be resolved prior to a future administration’s taking office. And third, the administration should avoid finalizing rules within the final eight or nine months of a presidential term because of the risk of Congressional Review Act repeals.5 The second priority this report addresses is an incoming president’s own opportunity to quickly rescind an outgoing administration’s regulations. The three rollback tools used by the Trump administration highlight opportunities for reviewing and repealing an outgoing administration’s policies. This report reviews those options and explains how they should be deployed. All these considerations together raise the stakes to complete regulations during the first two years of a presidential term. As this report lays out, an administration has the challenging task of promulgating resilient regulations quickly, while also reviewing and, if appropriate, undoing the regulations of the previous administration. This report is designed to provide guidance on meeting this challenge through highlighting the relevant timing considerations as well as the applicable legal rules. This report has two parts. First, the report describes the procedural and timing considerations that an administration should keep in mind as it seeks to create resilient regulations, striking a balance between thoroughness and efficiency. And second, this report offers advice about how an incoming administration can most efficiently and effectivelyreverse the regulatory agenda of an outgoing administration if desired. 2 To issue resilient regulations in the face of rollback threats: BEFORE ELECTION DAY:* • Assemble a team that (in addition to identifying people for top agency positions) develops a list of policy priorities for each agency and determines the contours of regulations to fulfill those policy goals. DURING THE TRANSITION PERIOD BETWEEN ELECTION DAY AND INAUGURATION:* • Develop contours of priority regulations for each agency. AFTER INAUGURATION:* • Direct agencies to immediately begin filling in the contours
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